Hope for the Unemployed In Predictions of Declining Productivity

01/17/2011 11:52 am ET | Updated May 25, 2011

Economic productivity is likely to slow down in the United States and Europe in 2011, but that's not necessarily a bad thing for the unemployed.

The Conference Board, a U.S.-research organization, predicts that labor productivity growth will fall "substantially" this year to 1.1 percent this year after a jump of about 2.8 percent in 2010. U.S. productivity, the Conference Board predicts, could even fall below the Euro-zone's.

Productivity growth means businesses are more efficient - churning out more per hour of work - which, in turn, can mean companies need fewer workers to make the same profit. In the recession's wake, less productivity might be the trade-off for employment growth, Bart van Ark, the Conference Board's chief economist, told the Wall Street Journal.

Strong growth in labor productivity in 2009 allowed businesses to lay-off workers while achieving relatively equal output, according a paper published by the San Francisco Fed.

The Conference Board expects labor productivity to continue to grow strongly in the top emerging economies. In India, labor productivity growth is expected to climb 5.8 percent this year. In China productivity growth is expected slow moderately to 8.7 percent from 8.4 percent in 2010.